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Confidence Crises and Public Debt Management
Giavazzi, Francesco; Pagano, Marco - C.E.P.R. Discussion Papers - 1989
Under free capital mobility, confidence crises can lead to devaluations even when fixed exchange rates are viable, if fiscal authorities can obtain temporary money financing of deficits. During a crisis domestic interest rates increase, reflecting the expected devaluation. Rather than selling...
Persistent link: https://www.econbiz.de/10005791449
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Learning, Endogenous Indexation and Disinflation in the New-Keynesian Model
Wieland, Volker - C.E.P.R. Discussion Papers - 2008
This paper introduces adaptive learning and endogenous indexation in the New-Keynesian Phillips curve and studies … episode price-setting firms' expect inflation to be highly persistent and opt for backward-looking indexation. As the central … that choose the rate for indexation also re-assess the likelihood that announced inflation targets determine steady …
Persistent link: https://www.econbiz.de/10005114241
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Forecast Combination and Model Averaging Using Predictive Measures
Eklund, Jana; Karlsson, Sune - C.E.P.R. Discussion Papers - 2005
We extend the standard approach to Bayesian forecast combination by forming the weights for the model averaged forecast from the predictive likelihood rather than the standard marginal likelihood. The use of predictive measures of fit offers greater protection against in-sample overfitting and...
Persistent link: https://www.econbiz.de/10005792336
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Long Term Debt and the Political Support of a Monetary Union
Uhlig, Harald - C.E.P.R. Discussion Papers - 1997
This paper examines the role of long-term debt in political support for a monetary union or, more generally, an inflation-reduction policy. The central idea is that the decision on membership of the union leads to a redistribution between debtors and creditors, if they are holding long-term debt...
Persistent link: https://www.econbiz.de/10005123670
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Fiscal Insurance and Debt Management in OECD Economies
Faraglia, Elisa; Marcet, Albert; Scott, Andrew - C.E.P.R. Discussion Papers - 2007
Assuming the role of debt management is to provide hedging against fiscal shocks we consider three questions: i) what indicators can be used to assess the performance of debt management? ii) how well have historical debt management policies performed? and iii) how is that performance affected by...
Persistent link: https://www.econbiz.de/10005136566
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In Search of a Theory of Debt Management
Faraglia, Elisa; Marcet, Albert; Scott, Andrew - C.E.P.R. Discussion Papers - 2008
A growing literature integrates theories of debt management into models of optimal fiscal policy. One promising theory argues that the composition of government debt should be chosen so that fluctuations in the market value of debt offset changes in expected future deficits. This complete market...
Persistent link: https://www.econbiz.de/10005136601
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Government Debt Management: The Long and the Short of It
Faraglia, Elisa; Marcet, Albert; Oikonomou, Rigas; … - C.E.P.R. Discussion Papers - 2014
Our aim is to provide insights into some basic facts of US government debt management by introducing simple financial frictions in a Ramsey model of fiscal policy. We find that the share of short bonds in total U.S. debt is large, persistent, and highly correlated with total debt. A well known...
Persistent link: https://www.econbiz.de/10011096106
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Modelling Long Bonds - The Case of Optimal Fiscal Policy
Faraglia, Elisa; Marcet, Albert; Scott, Andrew - C.E.P.R. Discussion Papers - 2014
We show how to model portfolio models in the presence of long bonds. Specifically we study optimal fiscal policy under incomplete markets where the government issues bonds of maturity N 1. Assuming the existence of long bonds introduces an additional intertemporal mechanism that makes taxes...
Persistent link: https://www.econbiz.de/10011083295
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Bond Market Clienteles, the Yield Curve, and the Optimal Maturity Structure of Government Debt
Guibaud, Stéphane; Nosbusch, Yves; Vayanos, Dimitri - C.E.P.R. Discussion Papers - 2013
We propose a clientele-based model of the yield curve and optimal maturity structure of government debt. Clienteles are generations of agents at different lifecycle stages in an overlapping-generations economy. An optimal maturity structure exists in the absence of distortionary taxes and...
Persistent link: https://www.econbiz.de/10011083839
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Harnessing Windfall Revenues in Developing Economies: Sovereign Wealth Funds and Optimal Tradeoffs Between Citizen Dividends, Public Infrastructure and Debt Reduction
van der Ploeg, Frederick; Venables, Anthony J - C.E.P.R. Discussion Papers - 2008
A windfall of foreign aid or natural resource revenue faces government with choices of how to manage public borrowing, public asset accumulation, and the distribution of funds to households (across time and household types), particularly when the windfall is both anticipated and temporary. These...
Persistent link: https://www.econbiz.de/10005656389